P800 Tax Calculation Letter from HMRC Explained
Received a P800 from HMRC? This guide explains exactly what it means, whether it shows an overpayment or underpayment, and what steps to take next.
What Is a P800?
A P800 is a tax calculation document issued by HMRC at the end of the tax year. It reconciles the income tax you actually paid through PAYE during the year against what you should have paid based on your final income and allowances.
HMRC issues P800s between June and October following the end of the tax year (5 April). Not everyone gets a P800, only taxpayers where a discrepancy is identified. If your tax was correct through the year, you will simply receive a P60 from your employer but no P800 from HMRC.
Since 2020, P800s have been accompanied by a "Simple Assessment" for some taxpayers, particularly those with state pension income above their tax-free threshold, but the P800 form is still widely issued.
P800 Showing Overpayment: You Are Owed a Refund
If your P800 states that you have overpaid income tax, HMRC owes you money. The letter will specify the amount of the refund and give you two options:
- Claim online: The fastest method. Log into your HMRC Personal Tax Account at gov.uk/personal-tax-account and follow the link to claim your refund. Repayment is usually processed within 5 working days into your bank account.
- Wait for a cheque: If you do not claim online within 45 days of the date on the P800, HMRC will automatically send a cheque to your registered address. This takes longer, allow up to 6 weeks.
Always claim online if possible, it is faster, more secure, and avoids the risk of a cheque being lost in the post.
P800 Showing Underpayment: You Owe HMRC
If your P800 states that you have underpaid tax, HMRC will outline how they plan to collect the debt:
- Tax code adjustment (most common): For underpayments up to £3,000, HMRC adjusts your tax code for the following year to collect the debt. Your tax code will have a lower number than normal, meaning more tax is deducted from each pay packet over the next 12 months.
- Direct payment: For larger underpayments, or if you are not employed, HMRC may issue a demand for direct payment. You can pay online at gov.uk/pay-self-assessment-tax-bill (even for non-Self Assessment amounts) or by bank transfer.
You do not owe interest on underpayments collected via a coding adjustment, this is HMRC's preferred collection method for modest amounts.
Why Do P800 Discrepancies Happen?
Common causes of overpayment (leading to a P800 refund):
- Emergency tax code applied at start of a new job
- Wrong tax code throughout the year
- Leaving employment partway through the year (only using part of your annual allowance)
- Multiple employers and allowance not allocated correctly
- Scottish or Welsh rates not applied correctly
Common causes of underpayment (leading to a P800 demand):
- Untaxed state pension income above your Personal Allowance
- Undeclared benefits in kind (company car, private medical, etc.)
- Interest or savings income not accounted for in your code
- Multiple employments with allowance applied twice in error
- Prior year underpayments caught in the annual reconciliation
What If the P800 Is Wrong?
If you believe your P800 contains an error, do not simply accept it. Gather evidence:
- Your P60 from the employer(s) for the relevant year
- Payslips showing the tax code and tax deducted each period
- Any letters from HMRC confirming your tax code
- Bank statements showing interest or other income
Contact HMRC on 0300 200 3300 (income tax helpline) or write to HMRC setting out the discrepancy with evidence. HMRC will review and correct the calculation if an error is confirmed. You can also use the HMRC online account to review and challenge the figures.
P800 vs Simple Assessment vs Self Assessment
| Document | Issued by | When | Action Required |
|---|---|---|---|
| P800 | HMRC | June-October after tax year | Claim refund or check underpayment plan |
| Simple Assessment | HMRC | After tax year (state pensioners) | Pay the amount shown (or dispute) |
| Self Assessment | You file it | By 31 January | Calculate and pay your own tax |
| P60 | Your employer | By 31 May | Keep for records |
Frequently Asked Questions
What is a P800 letter from HMRC?
A P800 is a tax calculation issued after the end of the tax year showing whether you have overpaid or underpaid income tax through PAYE. HMRC sends them between June and October following the April year end.
What should I do if my P800 shows I've overpaid tax?
Claim the refund online via your HMRC Personal Tax Account for payment within 5 working days. If you don't claim within 45 days, HMRC sends a cheque automatically.
What happens if my P800 shows I've underpaid tax?
For amounts up to £3,000, HMRC adjusts your tax code for the following year to collect the debt through PAYE. Larger underpayments may require direct payment.
What if I disagree with my P800?
Contact HMRC with your P60, payslips, and any supporting evidence. HMRC will review and correct the calculation if you can demonstrate an error.